Inventory & Accounting: Transactions & Financial Reporting
Inventory Accounting
Purchasing Inventory
- Purchases
- Debit Inventory
- Credit Accounts Payable or Cash
- Purchase Return
- Debit Accounts Payable or Cash
- Credit Inventory
- Purchase Shipping
- Debit Inventory
- Credit Cash
- Pay for Purchase
- Debit Accounts Payable
- Credit Cash
- Credit Discount (if earned)
Impact on Inventory
- Purchasing Inventory: Debit
- Returning Inventory: Credit
- Purchase Shipping: Debit
- Purchase Discount: Credit
Sales Transactions
- Sale
- Debit Accounts Receivable
- Credit Sales
- Debit Cost of Goods Sold
- Credit Inventory
- Sales
Key Accounting Principles and Equation Practice
Which of the following is not a step in the accounting process?
- Recording.
- Verification.
- Identification.
- Communication.
Which of the following statements about users of accounting information is incorrect?
- Regulatory authorities are internal users.
- Taxing authorities are external users.
- Present creditors are external users.
- Management is an internal user.
The historical cost principle states that:
- Only transaction data capable of being expressed in terms of money should be included in the accounting records.
Accounting Principles and Financial Statements: Key Concepts
Accounting Concepts and Principles
The accounting concept that maintains each organization is separate from all other organizations and individuals (including the owner) is known as the economic entity assumption.
Bonds and Liabilities
A bond with a face value of 100,000 and a quoted price of 99 ¼ has a selling price of 99,250.
If total assets are 225,000 and stockholder’s equity is 150,000, total liabilities would be 75,000.
Final Company issued a 20-year mortgage payable on January 1. Final is required
Read MoreLeverage, Risk, and Self-Financing Strategies
Item 10: Leverage and Risk
Break-Even Point
The break-even point helps us determine the sales level needed to cover all costs. It also reveals the potential loss of sales or profits when considering alternative balance sheet values.
There are two types of costs:
- Fixed costs: These are independent of production volume.
- Variable costs: These vary directly with the volume of production.
The break-even point in units (Q) is calculated as:
Q = Fixed Costs
Price – Variable Costs
Operating Leverage
Operating leverage
Read MoreInternational Finance: Markets, Risks, and Strategies
Chapter 1: Multinational Enterprises and Globalization
A Multinational Enterprise (MNE) has operating subsidiaries, branches, or affiliates located in foreign countries.
Globalization is the process of producing where it is most cost-effective, selling where it is most profitable, and sourcing capital where it is cheapest, without worrying about national borders.
Transnational refers to companies with widely dispersed ownership.
Domestic Firms’ International Activities
- Import and export of products,
Accounting and Finance Practice Questions
- TRUE
- $23,000
Net Income and Financial Statements
Net income (loss) appears in which two financial statements?
Income Statement and Statement of Stockholders’ Equity
Financial Statement Over Company’s Life
The financial statement that represents activity over the entire life of a company is:
Balance Sheet
Capital Expenditure Example
Adding a refrigeration unit to a delivery truck that previously did not have this capability is an example of:
Additions
Land Purchase Cost Calculation
Cowboy Development incurred